1. Introduction

Furthermore, buying rice, flour, and sugar can really help out families who struggle financially. It’s been shown through evidence from various sources that low-income families spend a lot of their money on these basic food items. Sometimes, they can’t even afford to buy enough food because of the high prices. Since sugar has such a big impact on global trade and industry, the lack of affordable sugar in poor families’ diets is a major problem. Making changes to the trade policies surrounding sugar could really make a difference for these families. This paper focuses on the importance of keeping sugar protection in place when it comes to forming U.S. policy.

This paper presents the first systematic analysis of the role that buying bulk sugar plays in household poverty, food security, and budget management in Southern Africa and thereby fills an important gap in the literature on the impact of purchasing in bulk. There are three reasons why purchasing in bulk is a topic of more than passing interest to policymakers and ordinary people. First, buying in bulk is an everyday component of consumer empowerment and can substantially impact individual and family health and well-being by saving the consumer money, insulating the family against food price inflation, greatly increasing the efficiency of consumer shopping and preparation activities, expanding the variety of foods which can be included in the family diet, providing social insurance against changes in income or food supply.

2. Benefits of Buying Bulk Sugar

The demographic variables suggest that income and the number of grocery visits are the most important variables in distinguishing between the three groups of consumers. The perceived benefits of buying bulk sugar and the perceived appeal of buying bulk sugar also differ across the three groups of consumers. In an attempt to attract the potentially non-buyers to buy bulk sugar, it is advisable for retailers to redefine the appeal by communicating the advantages of buying bulk in terms of cost-effectiveness, freshness, and health value through product communication, both in-store and out-store advertising, and educational campaigns to create awareness and stimulate sales.

In Malaysia, sugar is a basic commodity skillfully used in almost all processed foods and beverages, not to mention the many households that require it as a necessary ingredient in their daily drinks. Thus, offering sugar in a variety of packaging options such as standard packaging, medium-sized, and large containers in the form of retail packages and bulk packages are likely able to fulfill diverse consumer needs. The perception of benefits associated with an assortment of bulk products generally differs across various retail formats.

Purchase decisions depend on perceived benefits to be obtained from different retail formats. Bulk buying is known to offer benefits such as efficiency in shopping, savings in total shopping costs, and lower unit prices. Bulk products are offered in a variety of formats such as self-service formats (hypermarkets and discount stores) and counter service formats (general stores and wet markets). Most of the bulk items purchased under self-service formats are non-branded or store-brand items which offer quality and value for money, while counter service formats offer regional, non-branded, or private-label brands generally demanded for traditional and special-purpose items.

3. Challenges of Buying Bulk Sugar

Economies of scale, so commonly recognized in trade, are becoming increasingly important for enabling poor consumers, many of whom live below a low poverty line, to afford bulk everyday commodities such as sugar. There are notable differences between the type of costs facing individuals and the scenario that arises when demanders are groups with special bargaining power such as big households, churches, and NGOs. Furthermore, the preference of many poor households to purchase sugar bags of 5 kilograms or even less suggests that microeconomic imperfections seem to restrict purchasing too much in bulk sugar, particularly in urban markets. Unlike maize meal, sugar traders do not deal with this situation by giving a discount to customers who purchase their product in bulk. It is ironic that some consumers even save on their transport costs by having the exact amount of change ready to buy 1 kg of sugar at the popular squalor traders just a few houses from the usual minibus taxi stop. There has thus been a relative increase in the cost of these bulk commodities in countries where privatizing governments have reduced or abolished substantial subsidies to state parastatals involved in the provision of affordable essentials.

A study carried out among urban slum dwellers in South Africa, who also consume very small quantities of various other easily available wild fruits on a regular basis, indicated that the main constraints to consuming larger quantities of these fruits were cost, the effort required to prepare and collect, and that few of the wild foods can be eaten on their own. Residents of Afrooda, a low-income, mainly informal settlement on the outskirts of Durban, mentioned that they buy sole for et1.80 per kg in bulk, cutting off 1 kg and then put the rest back in the freezer to use for a month or two. “yomekee” (wild cucumber) is gathered opportunistically on journeys to the former homelands or areas around Durban and sold in quantities bought for 50c per kg. There were few circumstances in the settlement that allowed wild fruits to be brought back without cost, although trade opportunities with families in the former homelands facilitated the purchase of sole for 1.50c per kg instead of R3 in Durban.

Undoubtedly, most poor people in rural East and Southern Africa today find it hard to afford sugar. Extremely poor people may purchase as little as 1 kg of sugar once or twice per year, even though many in this income group, especially children, would like to consume sugar at least once a month. Spending up to 30% of what an extremely poor household earns collecting twigs and branches to barter for sugar is not unusual in urban slums in Ethiopia, according to Gibson and Worku (1993).

4. Strategies to Manage Bulk Sugar Purchases

Consumers were able to manage large sugar purchases using a variety of strategies. Many respondents commented that relatively limited cash resources led to sugar being one of the few items for which they had the option of either bulk or unit purchases; they would only ever have to contemplate this choice rarely (about every 4-6 months). Most non-users had unfortunately relatively serious or ongoing medical conditions and they (and their health care providers) were of the opinion that a reduced sugar (and salt) intake could be to their significant long-term benefit. All respondents managed to accumulate cash savings over relatively long periods (over the first few months of the year, when relatively low prices were believed to be predictable) as they prepared for relatively larger bulk purchases of cheaper (in the longer term) stock. Only 35.8 percent of bulk-buyers had managed to buy in this way. Unusual broad consumer concerns about the large price fluctuations appear to suggest that this strategy is relatively risky, or poses some limitation to their use of it.

Once the relatively large up-front cost of either 10-kg or more than 10-kg bulk purchase units has been managed, there are several strategies that may minimize the negative impact that bulk sugar purchases can have on household budgets. Relatively few consumers who participated in the study managed to buy in bulk at occasional promotional offers occurring at local supermarkets or grocery stores. Forty-two percent of non-users avoided such large bulky purchases due to lack of storage space (rather than aiming to avoid large up-front costs) and only sixteen percent of bulk sugar users had made use of the occasional promotional opportunities on offer.

5. Conclusion and Recommendations

Buying sugar in bulk provides a substantial household budget saving. Net savings based on the average retail price differentials in Australia amount to AUD $185 per annum for households who purchase approximately 12kg p.a. AusFood staff feedback suggested that lower retail prices were actually available for consumers with a little bit of effort in sourcing lower prices, most often from specific supermarket outlets. Our sample has been found to have a high level of bulk purchasing preference, and these savings could be realized for most of the sample. Our sample represents households of average size in Australia. Although sugar is a staple food item with a relatively constant price, variations in the economic and demographic composition of each participating household can lead to reasonably large contributions to disposable income or welfare. It does not, however, account for and capture adverse health effects or opportunity costs associated with these savings. For most households, sugar savings are likely to be considered to be budget-derived.

The results of this study shed light on the scope and implications of purchasing a significant staple in bulk in a high-income country like Australia. The findings are especially interesting given the tendency of the Australian consumer for the convenience of bulk buying. The potential cost savings of bulk purchases have been examined and quantified in many previous studies investigating bulk buying of food items such as meat, rice, cereal, etc. However, the actual savings and impacts on budgets for high volume, high staple use items such as sugar, tea, coffee, etc. have not been closely examined.